lawmakers' failure to appreciate Me

[detbuch]

Originally Posted by spence

But those high deductions are still paying a disproportionate amount of taxes. This is why the studies show Red states are on average consuming more Federal dollars than they provide. You're tax deduction theory is already factored in...

But they would be paying even more federal taxes if they didn't have the higher deductions. What is being subsidized, is the high taxes of those who have to pay in liberal spending states. It makes it more palatable to taxpayers in states with the high taxes required to pay for programs if they can deduct high property taxes to defray the federal tax burden. It makes it a little more likely that tax payers in high tax states will complain about excessive state spending if they can't buffer that with federal deductions.

But, even though money is recouped back to the state because of federal deductions, those high tax states still manage to overspend and get into unsustainable debt.

[Jim in CT]

Originally Posted by detbuch

But they would be paying even more federal taxes if they didn't have the higher deductions. What is being subsidized, is the high taxes of those who have to pay in liberal spending states. It makes it more palatable to taxpayers in states with the high taxes required to pay for programs if they can deduct high property taxes to defray the federal tax burden. It makes it a little more likely that tax payers in high tax states will complain about excessive state spending if they can't buffer that with federal deductions.

But, even though money is recouped back to the state because of federal deductions, those high tax states still manage to overspend and get into unsustainable debt.

"What is being subsidized, is the high taxes of those who have to pay in liberal spending states. "

Obviously true.

"those high tax states still manage to overspend and get into unsustainable debt"

Also true, especially here in CT, which now has unfunded debt to the tune of $35k for every human living in the state.

[spence]

Originally Posted by detbuch

But they would be paying even more federal taxes if they didn't have the higher deductions. What is being subsidized, is the high taxes of those who have to pay in liberal spending states. It makes it more palatable to taxpayers in states with the high taxes required to pay for programs if they can deduct high property taxes to defray the federal tax burden.

By this logic any deduction by anyone is subsidizing something...that doesn't make a lot of sense. The topic is if blue states contribute more net Federal tax revenue than they consume in Federal funding.

On this point the answer is yes they do.

[detbuch]

Originally Posted by spence

By this logic any deduction by anyone is subsidizing something...that doesn't make a lot of sense.

If there is a certain amount of money government says it must collect in taxes in order to operate, and it collects less from someone because of a deduction, it must make up that amount and get it from someone who can't make that deduction.

And, if the deduction makes it more feasible for a state to raise your taxes because they will be defrayed to the extent that you save in federal tax because of the deduction, then the state is subsidized the amount that your deduction saves you and makes it easier to pay your state tax.

The topic is if blue states contribute more net Federal tax revenue than they consume in Federal funding.

On this point the answer is yes they do.

That's your topic, not mine. The subject is obviously more complex and less meaningful than your "topic" makes it out to be--in many ways. Social Security and transfer payments and food stamps, blah, blah, are "entitlements." The states have no say in whether recipients are "entitled." These transfer payments are to people, not to states. And if those people move to other states, they take their entitlements with them. And states switch from red to blue or blue to red from election to election. Having more "entitled" persons living in states is not as economically useful to states as having wage earners. States can't directly collect taxes on the entitlement payments. And wage earners can spend more taxable money as well as be directly taxed on their wages. And, if it were so profitable to have federal transfer entitlement holders, the blue states should make it more attractive to draw them to their states. I don't know of any efforts to attract more federal welfare recipients to blue states.

Who contributes more to the federal coffers has no special relevant meaning. Is it something to boast about? Is it some sort of bragging rights? It seems what is more important is what amount states force their inhabitants to "contribute." I'd rather brag on living in a state that took less of my money than living in one that took more. But if you're proud of paying more state and federal taxes, then by all means, make that your meaningful topic.